Can Obama Really Use The 14th Amendment To Raise The Debt Limit?

It is Tuesday morning, August 2nd 2011. The Boehner Bill to raise the debt limit has gone down to instant defeat in the Senate. In turn, the Reid Bill, assuming it was not filibustered out of existence in the Senate, has been defeated in the House.

Meanwhile, Minority Leader McConnell, who has refused to negotiate a resolution with Senate Majority Leader, Harry Reid, meets with the president but nothing is going anywhere.

It is do or die day.

The President appears to have two choices – he can allow the nation to default and then instruct the Treasury Department to pick and choose which of the nation’s bills we will pay, or he can raise the debt ceiling on his own relying on Section 4 of the 14th Amendment.

While the Supreme Court has yet to rule on what the President’s power might be when it comes to usurping the powers of Congress so as to avoid the catastrophe of defaulting on our credit obligations, the highest court in the land has ruled on whether or not the executive branch can pick and choose which bills it will pay and which bills they will not.

According to SCOTUS, the President does not have the power to make these choices.

In Clinton v. New York, the Supreme Court struck down the line-item veto, arguing that the President is not allowed to pick and choose among provisions of a duly enacted piece of budget legislation even if Congress has given him to power to do so.

Keep in mind that raising the debt ceiling is about allowing for the payment of obligations already authorized by Congress. It’s not about having more money to spend on future government expenditures or programs. Rather, it is permitting the President to borrow enough money to pay the bills created when Congress authorized certain payments, thus requiring the President, by law, to make those payments.

As a result of Clinton v. New York, the Treasury not only does not have the Constitutional right to decide which of the bills previously authorized by Congress it will or will not pay, even the Congress is not permitted to tell the President what bills he should and shouldn’t pay or give him a general authorization to make those choices.

Thus, it would appear clear that were the President to instruct the Treasury Secretary to start picking the winners and the losers, he would be acting in direct contravention of the Supreme Court’s ruling and, as such, would be using his powers in an unconstitutional manner.

So, if the President wishes not to run afoul of Clinton v. New York, his only remaining choice would be to claim the Constitutional power to act in order to forestall a national catastrophe and choose to raise the debt ceiling on his own.

I can hear some of you wondering who gets to decide what is and what is not a catastrophe? You're thinking that just because Obama says it is a catastrophe doesn't mean it actually is a disaster. Indeed, according to Rep. Michele Bachmann and others, nothing bad is going to happen if we default come Tuesday night.

However, there are enough economists out there, not to mention a majority of the nation if the polls are to be believed, to support the notion that default would, indeed, be catastrophic. Thus, the President would likely not be nailed for improperly deeming the situation a catastrophic event just to grab some Constitutional power away from Congress.

Where Obama is more likely to get into trouble is dealing with the question of whether or not a unilateral raising of the debt ceiling is Constitutional- catastrophe or not.

So - is it Constitutional?

Your guess is as good as mine as the Supreme Court has never addressed the question.

But here is what we do know - or think we know.

Section 4 of the 14th Amendment reads-

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

In order to attempt to work out whether or not this grants the President the power to act without Congress in this regard, let’s look at the history behind this Amendment.

Section 4 of the 14th Amendment was the direct result of a concern, following the Civil War, that members of Congress from states that previously formed the Confederacy would attempt to block the country from paying the bills incurred by the North during the war. After all, the Congress wasn't about to pay for the Confederacy's war bills leaving the Southern states to face their obligations on their own. This did not make the Southern caucus very happy. To insure that this would not be a problem, Congress passed the 14th Amendment and put it out to the states for ratification, making it clear that the North's bills would be paid by Constitutional requirement while the South's would expressly not be covered by the government.

While the situation then is not clearly on point with now, there are some similarities.

What you had following the Civil War was the introduction of new Congressmen from what had been the Confederacy. Obviously, they had not been a part of Congress when the appropriations were made to pay the bills of the Northern army. When they arrived, they took the position that they were not interested in honoring those commitments of a previous Congress because it was not in their interest to do so-especially when Congress was unwilling to pay the war debts incurred by these Confederate States.

That is somewhat analogous to what we have happening today in the Congress.

The debts incurred that we will need to borrow more money to pay for were authorized and appropriated by prior Congresses. Now, we have an influx of Tea Party members who do not wish to honor those obligations because they don’t like that these prior Congresses ran up these debts - just as the members of Congress arriving from what was once the Confederacy didn’t like that previous Congresses authorized payment of the costs of the Civil War for the North- but had, obviously, not authorized payment for their one-time enemy.

Thus, there would appear to be some historical precedent -if not legal precedent - that says that the debt ceiling must be raised because the Constitution requires we pay those bills that Congress has already authorized and commanded the President to pay.

So, what happens if President Obama should take this road?

The first question is whether or not the Administration caneven be sued in court, thus setting up the opportunity for the Supreme Court to review the action.

In law, there is something called having ‘standing’ to sue. Nobody can get help from any court of law if they do not have standing to bring an action in the first place.

While you might imagine that Congress and/or American taxpayers who disagree with the President’s actions would be in such a position, it is nowhere nearly as clear as you would think.

1. In order to have standing in a federal court, a plaintiff must -

(a) be able to show that the plaintiff has suffered an injury and that the injury must be actual or imminent, distinct and palpable and not distract;

(b) have a causal connection between the injury and the conduct complained of so that the injury can be traced to the actions of the defendant; and

(c) be likely that a favorable court decision will redress the injury.

Can anyone really say that they have been injured by the President’s deciding to pay the debts our elected officials, past or present, have already authorized and ordered him to pay?

Wouldn’t that be like saying that you have been injured by your bank when they have the nerve to ask you to pay your mortgage pursuant to a contract you previously signed but now have decided that you don’t care to pay going forward?

If you think that, by being a taxpayer, you have standing to sue the President for spending your money, think again.

The Supreme Court has consistently ruled that- except in cases where taxpayers have challenged that the government has allocated funds in a way that violates the Establishment Clause of the First Amendment-the conduct of the federal government, when it comes to spending your tax dollars, is too far removed from the taxpayer to constitute an ‘injury’ for purposes of determining standing.

Oh well. Surely, Congress can sue for us, right?

Not so much. Congressional Members have typically failed in efforts to sue an Administration as Courts have ruled that Members of Congress lack the standing to do so just as taxpayers do as discussed above.

So, what happens?

Probably nothing happens.

While there is a chance that a loud cry will arise in the House of Representatives calling for the impeachment of the President for violating the Constitution, a cry that might lead to a vote of impeachment in that body, the Senate will never convict as a 2/3 vote is required to do so and there aren’t enough Republicans to make that happen.

Either way, if the Congress fails to reach an agreement on raising the debt ceiling that the President is willing to sign, the President will find himself in the position of having to choose between two actions, each presenting difficult questions of Constitutionality.

Talk about being stuck between a Ba-rack and a hard place.

Clearly, anyone who wants to be President of this country in the times we live in should have his or her head examined.